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Start Ups

Montgomery County is a great place to start and grow a small business! When starting a new business, it helps to follow some basic steps to ensure you have a sound plan and required documentation.

Review our Business Start-up Guide for links to agencies and resources to get you started. This guide will direct you to the proper agencies and helpful resources to get you started. Sections include information on:

  1. Assessing your potential as an entrepreneur.
  2. Researching your idea and developing a Business Plan.
  3. Selecting  your legal business structure.
  4. Registering the name of your business.
  5. Filing Articles of Incorporation with the State of Maryland.
  6. Obtaining a Federal Employer Identification Number (FEIN).
  7. Registering for tax accounts with Maryland.
  8. Researching and obtaining required licenses and permits.
 

Step 1:  Assessing Your Potential as an Entrepreneur

Is business ownership right for you?  Learn more about the steps involved in starting and running a business and take a quick self-assessment to determine if entrepreneurship is right for you, right now.


Step 2: Researching Your Idea and Developing a Business Plan

A business plan will help you transform your great idea into a viable business. You will want to undertake research to determine as much information as possible about crucial aspects of your potential business: customer demand, industry trends, the target market and your competition. A business plan will also help you to develop a strategy and plan for marketing, financing, and managing your new enterprise. Business plans are often requested by financial institutions, investors, creditors, potential employees and partners and you owe it to yourself to complete one before investing your hard-earned time and revenue into this new venture. 

Resources to assist with the research and development of your business plan include:


Step 3:  Selecting your legal business structure

Determine which form of business structure is most appropriate for your operation.

There are several types of business structure to choose from: Sole Proprietorship, General Partnership, Corporation, Benefit Corporation, Limited Liability Company (LLC), Limited Partnership, Limited Liability Partnership, Benefit Corporation, or Non-Profit. 

Each structure has certain advantages and disadvantages so before making a selection, we recommend obtaining advice from an accountant and attorney, or professional advisor such as  SCORE or the  Corridor Region of the Maryland Small Business Development Center. The Small Business Administration offers an overview of the different types of business structures to help you determine which is best for you.  


Step 4:  Registering the name of your business

Several steps are involved with naming a business: checking to be sure the name is available; reseaching whether a meaninful domain name can be selected; completing proper registrations, and considering if a trademark is appropriate.

A.  Before selecting and reserving the name for your business, research whether and how your name is already in use:

B.  Check domain name availability if that might be a factor in your business:

C. Register the trade name of your business with the Maryland Department of Assessments & Taxation, fee: $25.00 (add $50 for expedited service).

D. While not required, you may want to research and consider obtaining a trademark on your name from the  U.S. Patent and Trademark Office.


Step 5:  Filing Articles of Incorporation with the State of Maryland

Different types of business structures are subject to different filing requirements and fees.

  1. Sole Proprietor or General Partnership: No legal document filings or other formalities are required, except compliance with State and local licensing and taxation requirements.
  2. Limited Liability Corporation (LLC): File Articles of Organization with the  Maryland Department of Assessments and Taxation.  Fee: $100.
  3. Limited Liability Partnerships (LLP) and Corporations: File Articles of Partnership or Articles of Incorporation with the  Maryland Department of Assessments and Taxation. Fee varies. Seek legal advice and assistance.

Step 6:  Obtaining a Federal Employer Identification Number.

This is very quick and easy to do. It is available on-line from the  IRS.

You need an EIN if you:

  • Start a new business
  • Hire, or plan to hire, employees (including household employees)
  • Open a bank account that requires an EIN for banking purposes
  • Change the legal character or ownership of your organization (for example, you incorporate a sole proprietorship or form a partnership)
  • Purchase a going business
  • Create a trust
  • Create a pension plan as a plan administrator
  • Are a foreign person and need an EIN to comply with IRS withholding regulations
  • Are a withholding agent for taxes on non-wage income paid to an alien (such as an individual, a corporation, or a partnership)
  • Are a state or local agency
  • Are a federal government unit or agency
  • Form a corporation
  • Form a partnership
  • Administer an estate formed as a result of a person's death
  • Represent an estate that operates a business after the owner's death.

Step 7: Registering for tax accounts with Maryland

Filing and paying business taxes can be complicated. The  Maryland Comptroller's Office has a dedicated section for information needed by business taxpayers.

Complete the  Maryland Combined Registration Form to establish your tax accounts, which may include:

  • Admissions and amusement tax account
  • Income tax withholding account
  • Sales and use tax license
  • Tire recycling fee
  • Transient vendor license
  • Unemployment insurance account

Personal Property Taxes

In Maryland all businesses are taxed on business-owned personal property such as furniture, fixtures, office and industrial equipment, machinery, tools, supplies, inventory and any other property not classified as real property. You must file a  Business Personal Property Return every year, on April 15, regardless of whether you have property. The minimum fee to file the return is $300 per year. Businesses are automatically registered when they are formed and file articles of organization/incorporation with the State. You will receive a personal property tax bill after the return is reviewed by the State of Maryland.

Sole Proprietorships or General Partnerships

Sole proprietorships or general partnerships must obtain an Unincorporated ID number with the Maryland Department of Assessments and Taxation so that their business personal property can be properly assessed.


Step 8: Researching and obtaining required licenses and permits

Neither the State of Maryland nor Montgomery County issues a general business license. However, business licenses may be required for specific business activities and occupations.

Occupational Licenses

  • The Maryland Department of Labor, Licensing and Regulation (DLLR) is responsible for issuing Occupational and Professional Licensing in specific industries. Please contact the  Department of Labor, Licensing and Regulation with any questions: phone: 410-230-6220; email:  op@dllr.state.md.us
  • Trader’s licenses. Most retail (and many other) enterprises require a business license to operate legally in Montgomery County. To determine whether your particular business activity requires a license, contact the  Montgomery County Clerk of the Circuit Court; phone: 240-777-9400
  • Construction trades and vendors. The  Montgomery County Department of Permitting Services (DPS) issues the follwoing licenses:
    • Agricultural Producer
    • Benefit Performance
    • Construction Debris Reclamation Facility
    • Electrical
      • Apprentice Electrician
      • Electrical Business
      • Journeyman Electrician
      • Master Electrician
    • Sewage Sludge Utilization
    • Sign Installer 
    • Vendors
      • Door To Door
      • Regular Route
      • Sidewalk Vendor/Pushcart
      • Site Specific

Consumer Protection Licenses

The  Montgomery County Office of Consumer Protection issues licenses for the following:

  • Commercial Parking Lot Registration
  • Motor Vehicle Repair/Towing
  • New Homes Builders
  • Radio, Television and Appliance Installation and Repair
  • Secondhand Personal Property Dealers

Food, lodging and health related licenses

The Montgomery County Department of Health and Human Services, through Licensure and Regulatory Services, licenses and inspects, under both county and state regulations, facilities such as assisted living facilities; group homes; food service facilities (including restaurants, grocery stores, bars, mobile food trucks, and bed and breakfasts); facilities offering bingo, raffles and amusements; massage establishments; swimming pools; tanning facilities; transient lodging; and video game facilities. An updated listing is available on the  Licensure and Regulatory Services web site.

Home based businesses

If your home-based business generates more than five vehicle visits per week (excluding deliveries) or has one nonresident employee, you must register your business with the Montgomery County  Department of Permitting Services. Home based day care facilities, private educational institutions, boarding houses, tourist homes, home health care practitioners and lawn maintenance services must obtain separate licenses through the Department of Permitting Services.

Day Care Centers

Whether opening a childcare program in a separate facility or in a private home, a license must be obtained from the Maryland State Department of Education,  Office of Child Care. Orientation sessions are scheduled regularly to explain the licensing process and provide the application materials. Call 240-314-1400 and ask to register for the family childcare orientation if the request is to care for children in a home, or the center orientation if the request is to operate a program in a separate facility. 

Zoning and Permitting

If your business will own or lease commercial property (i.e. storefront, office space, etc.), you must ensure that you are in compliance with local laws regarding the acceptable activities in that location and with local laws regarding safety (i.e. use and occupancy, fire codes, etc.). Contact the Montgomery County  Department of Permitting Services.

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